Scripps’ Symson: Omicron Won’t Stop Spot TV’s Upward Trajectory
Spot TV’s resurgence has too much momentum to let a little thing like a pandemic fourth wave derail it, says E.W. Scripps President-CEO Adam Symson.
“As a country, we have found a way to move beyond the lockdowns that we had in 2020 and to live our lives,” he says. “Businesses are going to have to go on and adjust.”
That adjustment includes the recognition that keeping spot ads on the air even in times of an omicron surge has long-term benefits, Symson says.
In a wide-ranging interview with TVNewsCheck Editor Michael Depp, Symson considers the key role sports betting has played in spot TV’s ascent. He digs into the company’s expansive diginet strategy and where it intersects with an equally bullish streaming play. He also lays out his lingering frustrations with ad technology; the reasoning for a major reboot of Newsy and preparing for ransomware attacks.
An edited transcript.
Last year, Scripps was talking a lot about the phenomenon of “self-bundling,” in which your diginets would be an important part of a viewer’s a la carte habits. Have you seen growth in your diginet audiences? If so, by how much?
Absolutely. The over-the-air consumer is bringing together the choices they have in the marketplace that they subscribe to. In this case, they are using a digital antenna and bringing in over-the-air networks, and our networks represent a fair bit of the share of the programming streams available to them. We have seen significant growth in revenue as well as viewing time on all of our over-the-air networks. The share of viewing represented by a Scripps network or a Scripps programming stream has expanded. About 30% of viewing in the over-the-air marketplace is happening on a Scripps channel.
Newsy underwent a major overhaul last year from opening a new facility in Atlanta to hiring a new head in Eric Ludgood, adding many more staffers and expanding both programming and distribution. In the end, how big was Scripps’s overall investment and what was your thinking behind it?
We made a significant investment in order to capture what we think is a really terrific opportunity to serve an audience that we know exists: American consumers tired of the cable news sort of shift from journalism to opinion. We know there are a lot of consumers out there trying to make decisions about the lives that they want to live.
We have seen — during this pandemic, the election, the social justice unrest —that news is in high demand, and for those folks who are not consumers of cable or not in the pay TV marketplace, let’s think about where they have to go on television. They have been relegated to maybe a half hour of network news and local news. With Newsy going over the air, we are bringing opinion-free, high-quality journalism from the connected TV universe where Newsy has been growing quickly to the over the air universe, and we think there is a tremendous opportunity.
That is why we have spent what we think is the investment necessary in order to upgrade the facility, the resources, the storytelling and the talent and bring a product to the marketplace that we know will resonate.
Can you put a number on that investment?
No. I mean I can, but I won’t.
Has it paid off yet? What kind of audience growth have you seen and on what platforms are most people watching?
Newsy is now available to 92% of U.S. households over the air and then pretty much on any of the major connected TV platforms. The audience has been growing steadily on connected TV ever since we launched, and we continue to see good response from the revenue that we continue to grow on the connected TV side.
It is a little early to know exactly how much audience we are developing on the over the air side, but I can say this: Direct response advertisers are very focused on efficiency in their buys, and we have seen already that the direct response advertisers that rely on Newsy in the over the air marketplace are renewing and at higher rates.
Is your connected TV audience bigger than your OTA audience for Newsy?
The connected TV audience is being monetized more efficiently than the over-the-air audience. Until we initiate ratings with Nielsen, we won’t be in a position to compare and contrast the size of the audience.
Is Court TV up next for a similar reboot?
Court TV has been moving on the right path. We have suffered a little bit during the lockdowns when trials were closed, but we have seen the importance of the access Court TV provides to people by broadcasting the trial of Derek Chauvin, and the men accused and convicted of killing Ahmaud Arbery. We expect to continue to work to bring the kind of legal journalism that we know Americans want access to with transparency to the American public.
Do you have some synergies between these two entities because they are co-located in Atlanta and have some overlaps in news content?
Absolutely. The synergy is not only between Court TV and Newsy, but we have identified the opportunity for greater synergy between our local media business as well. We are operating at this point like one large national, even international, news organization.
Spot TV made a big recovery last year, and obviously 2022 is an election year. What are your thoughts about how sports gambling and auto are going to perform this year?
I expect the automotive industry advertising to continue to be hampered by the supply chain issues. We have certainly seen that all through 2021, and I expect that will continue through a good portion of 2022.
On the other hand, we have also seen a big bright spot in sports betting, and we continue to see more states legalize sports betting. [It] will go through its own changes as companies recognize over time that they have now made their entrance into a market and they start to shift their dollars into the newer markets while maintaining spend in the markets that they have been in. Sports betting has definitely been one of the most important categories for us.
Do you see omicron having a depressive short-term effect on spot this quarter?
We haven’t seen anything to indicate that any of the momentum we saw in 2021 and even in the fourth quarter has been altered in any way by omicron in the first quarter. The difference is on the national side and our national networks. Omicron created a delay in the booking of the fourth quarter, but at the end of the day, it actually wasn’t much of an issue. The bookings were coming a little bit later, there was a little bit less transparency into the business early on. At the end of the day, the advertising market was there. As a country, we have found a way to move beyond the lockdowns that we had in 2020 and to live our lives.
Businesses are going to have to go on and adjust. Advertising copy is going to change. Industries are going to adjust, and they all recognize that there is a straight line between their television spend and their cash register ringing. The smart ones, even in times of lesser consumer demand, recognize that staying on air actually benefits them all year long. As we get into January, I expect we will see first quarter get placed and that the year will continue on in just the same way that third and fourth quarter did.
The ransomware attack against Sinclair rattled most broadcasters. What is Scripps doing to protect itself against similar attacks?
We have been focused on cybersecurity and ransomware for quite a long time. It is something our board focuses on regularly. We dialogue with the board and senior leadership quite often, and we have been executing a long-term strategy to secure our infrastructure. It is a bad situation. We all can work better together as an industry and share more information so that we can insulate American media properties from what is oftentimes an external threat, external to the United States coming in and trying to impact the American media marketplace.
The NAB has an industry working group. Our CISO, Mike Kelly, plays a very active role not only with an industry working group, but also in several local working groups. We work very closely with law enforcement and several other private companies to share information because we are all united to protect the resources of our companies and the media marketplace.
Scripps has had OTT channels for its local stations for some time now. Are your audiences growing there? What are you learning about the right playbook to draw both audiences and advertisers into those local streaming efforts?
We have been very aggressive in the digital space, distributing our product on all of the TV platforms. We have done a lot of customer acquisition, we have done marketing and we have recognized that for a portion of our local communities, they want the news and local programming at their disposal when they want it. Many of them are using their internet connected TVs. Having our brands represented on those platforms has been an important opportunity for us to secure our product in their lives.
At the same time, we have been aggressively in the marketplace with local advertisers teaching them about the power of connected television. It has been much easier for us to sell connected television than it ever was as we navigated the early days of digital advertising. We have seen a lot of positive momentum. Our focus on connected TV sales was a significant component of what drove us to have industry-leading core revenue performance. Bringing that kind of omnichannel approach to the local marketplaces has been very successful for us.
Are you doing more direct sold in your local markets than programmatic at this point?
It really depends on the marketplace, on the geography. We have one of the best programmatic teams in the country, and we leverage the power of programmatic in order to maximize yield. But at the same time, all of our salespeople are out there not only selling our owned-and-operated platforms but selling the collection of partners that we have through our Octane products. We are offering data-powered Octane Verify, the ability for us to bring connected television and spot together with attributions. It has been very successful in the marketplace.
From a local content standpoint, are you mirroring what is on air and with some VOD options or are you doing more content differentiation for streaming at the local stations?
Yes and yes; depends on the station. Some stations are doing products specifically for connected television that are niche in nature or entertainment in nature. We are leveraging our news product and simulcasting our newscasts. In Florida, we have collected all the news from all of our TV stations and launched Florida 24, which is, as far as I know, the only 24-hour streaming service that is also available over the air in some markets.
On the national side, I expect us to be incredibly bullish on the opportunity that we see in the connected television marketplace. It is not a leap to recognize the value that we can bring to the [free, ad-supported TV] marketplace [FAST]. Over the course of the last year, we have gotten the rights to take those streams that we were already delivering on our over-the-air networks and to bring them into the FAST platforms. We have launched Bounce and Ion+. We are going to be bringing a Grit product out. We are going to continue to move more of our programming streams into the [FAST] marketplace. We see very little difference between the consumer that wants to watch for free over the air and the consumer that wants to watch for free using a connected television.
For the diginets, basically the idea is mirroring what’s on air to the linear feed on the stream?
In some cases, it is the same, in some cases it is slightly different because of rights. When we are talking about Newsy and Court TV, it is a simulcast and we are able through master control to run the same feed. As soon as we get to a break when we move into the connected TV marketplace, those consumers are monetized through dynamic ad insertion. On the broadcast side, we use broadcast advertising.
We really have to think about this from a consumer’s perspective. At the end of the day, the lean-back experience of watching television is the lean-back experience of watching television whether it is delivered over a coax cable, over Wi-Fi or over the air. The technology we use to deliver it and the technology we use to monetize it, that is where we are bringing an advantage.
I expect our peers will eventually do everything that we are doing on the local side with connected television, but when you compare the amount of inventory that is going to generate compared to taking an Ion, a Grit, a Bounce, and bringing those programming streams into the [connected] marketplace, that is a real differentiator for Scripps. That is something we have been talking to our investors about because we see a significant opportunity for our company to achieve a level of scale that none of our peers can in the connected TV marketplace.
Are you satisfied or frustrated with the performance of ad technology on connected TV?
I am satisfied with the performance of the technology at this point. We have to see the demand catch up to the supply in terms of the supply of audience. In some cases, the reason you will be watching a connected TV product and see the same ad repeated in the same block is because the advertisers haven’t yet arrived. That is our job: to continue to influence the ad-buying community so they recognize why they should be moving some of their dollars to Scripps’ connected TV products.
The networks are doing this, too. We are moving into the network upfronts in a way that allows them to understand that they can buy all our products and reach the different audiences at the same time. That is key to bringing those linear streams into the connected TV marketplace.
One area that we are very focused on that I am not satisfied with yet relative to the technology is our ability to make linear advertising connected. If you think about the opportunity ahead, I believe it won’t be long before we are able to do the same kind of data-informed multi-versioning, leveraging over-the-air linear streams. If we can take that linear inventory and treat even a portion of it like it is connected with data and multi-versioning and be able to achieve the kind of CPMs and yield growth that we see in the connected TV space on linear, that is going to be a significant opportunity for our company and our investors.
In part two of our Executive Session with Adam Symson on Tuesday, read about his take on the FCC’s regulation of vMVPDs; the “Great Resignation’s” impact on Scripps; the likelihood of a permanently hybridized post-pandemic workplace; DEI and NextGen TV.